In our last edition of partnership e-news, we mentioned that we would be looking in a little more detail at some of the regulatory and ethical issues that arise from outsourcing legal work.

Interestingly, this has been identified as a key issue by the Law Society.  The President of the Law Society has raised this at recent meetings at the New York Bar Association and will be considering the implications at a number of round-table discussions in the UK over the next few weeks.  The debate on legal outsourcing in the US has been ongoing for some time now.  Back in 2006, the New York Bar issued guidance that it was ethical to outsource legal work to lawyers and non-lawyers in the US and abroad, provided that rigorous supervision is undertaken, the client’s affairs are kept confidential, conflicts of interest are avoided and the client’s consent is obtained in advance.

The preservation of confidential information is considered to be of paramount importance and concern when outsourcing legal work.  A client will be understandably worried that confidential information may be disclosed to a third party provider who may not necessarily share the same views or standards on client confidentiality.  Following a similar approach to that of the New York Bar, the Law Society has referred to this in its guidance on client care letters, advising that a firm should inform its clients in advance, in its retainer letter, if any of its work will be outsourced.  Drawing attention to this may mitigate any breach of confidentiality which might later occur.  However, given that this will not necessarily eradicate a risk of misconduct arising, it is imperative that a confidentiality agreement is also entered into with the provider of the outsourced services and that the client is informed of this.  In addition, it is advisable for the client to be given the opportunity to request that his work is not outsourced.

A further step which firms should consider taking is to actually inform clients at the outset what the benefits of outsourcing are.  This will help clients understand the process and reassure them that appropriate measures and safeguards are in place to protect its confidential information.  The more sophisticated clients will appreciate that, in any event, partners often delegate tasks to more junior members of a team and that such delegation is advisable to keep costs low, provided the junior is properly supervised and that the partner is ultimately responsible for the final product.  The same principles apply to the outsourcing of work. 

Firms must also ensure that their legal outsourcing providers do not have any conflicts when carrying out any work.  At the very least, firms should ensure that their suppliers maintain up to date records of prior engagement and have an effective conflict checking system which will be adhered to prior to taking on a particular matter.

If the above steps are taken, it will be much easier for a firm to show that a client’s best interests have been observed.

For more information on these issues please contact

Miguel Pereira

or your usual Lewis Silkin contact